November 14, 2005

New Google Analytics Could Mean Lower AdSense Revenues

Doing my regular morning read of Threadwatch and saw this post on Google Analytics. I am sure that the stats and ability to track both site users and ROI on Adwords campaigns in one place will be very good. In fact, some other recent tools Google released I've already raved about.

But as an AdSense Publisher, I can see where these better stats for Adwords publishers may mean:

1. Many more Adwords Publishers tracking their campaign results and ROI compared to those using conversion tracking in Adwords right now. Google Analytics will be a much better tool. More tracking means more AdSense Ads being scrutinized for ROI.

2. More accurate ROI tracking and reporting (Just an assumption as I haven't seen or tested Google Analytics yet), which means a higher likelihood of smart pricing kicking in on AdSense ad revenues to produce lower $ per click for publishers.

3. If you practice Adwords/Adsense arbitrage you may think twice about implementing Google Analytics because there's a possibility you may be causing lower AdSense Revenues for yourself! If your AdSense Ads don't produce a good enough ROI for your own Adwords Ads, you may be contibuting to less $ per click. I don't have a case study on this, but I have seen myself where I used conversion tracking on my Adwords campaigns and saw that for Adwords ads that have low ROI, my AdSense ads on the same topic had less than stellar returns (granted all the Adwords ads on my AdSense pages are from various advertisers).

Definitely, whether Google Analytics makes a dent in Adsense publisher revenues remain to be seen, but it's worth tracking and testing (and perhaps figuring out a way around the potential problem).